Microeconometric Analysis of Residential Water Demand

Cristina Lopez-Mayan

Working Papers from CEMFI

Abstract: I present a microeconometric model to analyse residential water demand using panel data. Pricing has an increasing-block structure. Database contains individual consumptions from water meters and lacks further information. Permanent income is treated as an unobservable individual effect determining optimal consumption. I also consider a time-varying shock to connect latent and observed demands. The economic setup gives rise to a random effects model with a nonlinear individual effect. I use likelihood-based indirect inference for estimation. I compute price-elasticities and predict the effects of a tariff change. The methodology can be applied to analyse demands of other goods with increasing tariffs.

Date: 2008-04
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Citations: View citations in EconPapers (2)

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https://www.cemfi.es/ftp/wp/0803.pdf (application/pdf)

Related works:
Journal Article: Microeconometric Analysis of Residential Water Demand (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cmf:wpaper:wp2008_0803

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